Tiffany & Co has reported lower-than-expected sales in the second quarter of the year, as the strong US dollar and the devalued Chinese yuan combined to take their toll.
The US luxury jeweller also warned that overall profit will drop for the full 2015 year.
In a statement made today, the New York-based company announced profit was 86 cents a share – equivalent to about 56p – which was lower than the 91 cents that analysts had estimated, according to data compiled by Bloomberg.
The company’s total revenue fell 0.2% to $990.5 million (£642m) in the quarter ending 31 July, again missing analysts’ estimates, which had been $1 billion, according to Thomson Reuters.
Excluding currency effects, revenue rose seven per cent, while net income fell 15.4% to $104.9 million.
Tiffany & Co said it expects net earnings to decline two per cent to five per cent for the full year.
It blamed a strong US dollar for the lower-than-expected results, which hit tourist spending in the country and reduced the value of overseas sales.
Chief executive Frederic Cumenal explained the reasons behind the disappointing results. "The adverse effects from the strong dollar have been even more significant than initially expected," he said. “The company is looking to new designs and products, such as the CT60 watch collection, to help fuel demand.”
Tiffany’s shares dropped in early trading after the results were released to $79, having already fallen 20% through Wednesday’s close.